Why hire a consultant

Despite the prestige associated with the consulting industry, consultants also face a lot of criticism about their actual worth and ability. Do consultants really bring that much value to the table?

One thing's for certain: There’s never been a shortage of clients willing to pay a premium for consulting services. Why? Because countless projects worth several millions wouldn’t have been delivered without the contribution of consultants. And during tough economic times, companies are beating down the doors of consulting firms.

What exactly do companies gain from retaining the services of consultancies?

Breadth of Experience

Yes, it’s true that a CEO is probably more knowledgeable about his own company than any new consultant from a top university. However, depth of knowledge is different from breadth of experience. CEOs may not necessarily be aware of the best practices used by competitors, while a consultant’s breadth of experience is developed through their many projects with similar organizations. They can therefore offer an innovative and refreshing perspective, while a CEO can assist in benchmarking the company’s processes with industry leaders. It’s like providing an educated mirror for a company—knowledge that’s invaluable to any organization.

Impartial Advice

Consultants are viewed as neutral third parties, a role that’s essential for certain types of collaboration. Internal employees may be conflicted and may not see the need to provide harsh yet practical recommendations to their peers. Because a consulting professional is disinterested, his or her decisions won’t be clouded by internal concerns. A consultant won’t hesitate to give unemotional and impartial recommendations that will improve the company. That’s why many large corporations choose to heed the advice of premium consulting firms.

Cost-effectiveness

Although hiring premium consultancies may be pricey, it’s still cheaper than trying to create intellectual property and knowledge bases in-house. Bringing in management consultants from McKinsey or Bain makes life easier for executives, and the proposed strategies of top-tier firms are usually approved and implemented. Companies going through difficult times are willing to pay for this convenience and efficiency; they need the best solution as soon as possible, and consultants are the only professionals who can get the job done.

Skill Set Augmentation

When companies hire consultants, they benefit from hands-on training, particularly if the project involves heavy client interaction. Top consultancies know that providing the best recommendations isn’t enough if their clients won’t be able to implement and maintain the suggested changes. Thus, another value that consultants bring to the table is client education on necessary knowledge, skills, and mindsets.

Political Cover

Consultants are also used as scapegoat by CEOs who are unwilling to make unpopular decisions. Because consultants are treated as external parties, they often do the dirty work. Generally, the board retains the services of external consultants so they can get the desired results while distancing themselves in case things don’t go as planned. They use consultancies as political cover, particularly if the decision involves major risks.

Different Perspective

Companies undergoing tough times often get caught up with daily tasks and fail to see the bigger picture. Consultants add value to business operations in terms of offering a different perspective, which can lead the client to identify the underlying problems.